Schwing USA charges back – 10 Lessons for leveraging Chapter 11

All Blog Posts, Change, Strategy / 19.03.20140 comments

A hallmark of an effective CEO Peer Group is having members with a diverse set of experiences. A CEO mix featuring a variety of industries, company sizes, and life cycle maturity stages  creates a brilliant wealth of knowledge that members can draw on to assist in whatever challenges they are currently facing. As some Vistage members have quipped, it’s nice to have the opportunity to learn from someone else’s mistakes rather than to make them all yourself.

My Minneapolis Vistage groups include several Fast50 members, a Power50 member, the 2013 Manufacturer of the Year and a perennial “Best Place to Work” winner. CEOs are going to have a lot of ups and downs in their careers just like anyone else, and CEOs need a forumthat can help us through the bad times as well as the good. Our CEO Advisory Board is fortunate to include Brian Hazeltine, CEO of Schwing America, who was featured last month on the cover of Enterprise Minnesota for leading his company back from the brink of financial ruin.

Read Schwing Ahead in the February issue of Enterprise Minnesota® magazine.

EM cover 2

As Lynn Shelton, Enterprise Minnesota’s Director of Marketing & Communications, writes in their February 21,2014 e-Trends newsletter:

“In September 2009, just two weeks after taking over as CEO, Hazelton brought the company into Chapter 11 bankruptcy protection, just one more move in what our profile called “an almost surreal litany of recession-related poor timing and bad luck that forced the nation’s leading manufacturer of concrete pumps to spend more than four years in a corporate bob and weave,” waiting for the housing industry to bounce back.”

During the housing boom ten years ago Schwing was racing to keep up with demand. At its peak, Schwing grew to 680 employees and ran its 400,000 square-foot facility in White Bear Township 24/7. When the construction industry bottomed out, Schwing had to lay off close to 600 employees and close its in-house paint operation, welding shop and fabrication facility. The story of how Hazelton and his team nimbly managed through, creatively leveraging the Schwing brand and keeping close to its customers (who were also enduring a difficult time) is an inspiration.

Here are few key lessons Brian Hazelton of my Minnesota Vistage group can teach us about surviving a  “perfect  storm” and repositioning his company to thrive and double next year.

1)     Believe in your product strongly enough to fight for it even when the universe seems to be turning against you

2)     Beware of unrelated but compounding converging trends

3)     When there is a will there is a way – the drive to survive can move mountains

4)     Be willing to take on multiple jobs when times are tough

5)     Don’t be afraid to reinvent yourself

6)     While Chapter 11 is nobody’s first choice, it can be the best strategic option when you are not left with many paths forward

7)     Don’t forget about your customers even when they aren’t buying

8)     Help your customers sell your product

9)     If you don’t tell your story when times are tough, somebody else will and odds are you won’t like their version as well

10)  Paying it forward can bring about payback – loyalty is a form of Karma

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